Minister says Brexit could lead to abolition of VAT on tourism

A senior Cabinet Minister has said that the Brexit referendum vote could lead to a cut in the rate of VAT levied on tourism.

John Whittingdale, Secretary of State for Culture, Media and Sport, speaking at a British Hospitality Association (BHA) summit in London said:

“If we wanted, for example, to abolish VAT on accommodation or attractions, we could now do so. We couldn’t have done when we were in the European Union”

The remarks by the Minister, who oversees tourism and hospitality in the UK, were warmly welcomed by representatives of businesses from across the UK industry.

Mr Whittingdale echoed remarks by Nick Varney, Chairman of the BHA and Chief Executive of Merlin Entertainments, who said:

“Tourism and leisure can continue to grow under Brexit. Initially a weaker pound will encourage visitors and also exports will flourish. We should seize the moment and lock in that competitive advantage with a permanent cut to VAT for accommodation and attractions, and possibly in the future also for restaurants.”

He said that once uncertainty had died down British tourists would feel encouraged to spend more in this country and visitors from Europe would be more likely to visit the UK.

Mr Varney is a leader of the Campaign to Cut Tourism VAT, which calls on the Government to reduce the rate of Tourism VAT from 20% to 5%. Across Europe 31 different countries, both inside and outside the EU, already enjoy the benefits of a reduced rate of Tourism VAT, meaning that Britain is losing ground to competitors.

The announcement is a boost to the Campaign, which has already secured the support of 160 MPs across all parties and the support of the three devolved administrations across the UK.

Tourism and hospitality accounts for 9.0% of the UK’s GDP, and is our 6th biggest export. The industry employs 10% of the UK’s workforce and has created 1 in 5 new jobs in the past 5 years.